The United States will see no more than 20 or 30 proton therapy centers over the next decade, and the capital costs to build them have shot up over time, were the take-home findings of a recent conference on proton therapy. And to succeed, proton therapy centers should think carefully about marketing.

"Proton therapy needs to be looked at as a retail service," Alan E. Morrison, managing director of ZAC Capital Partners LLC, told attendees.

The Proton Therapy Centers conference, which met from Feb. 16-18 in Philadelphia at the Sofitel Hotel, is a gathering for the people who run or want to run one of the most advanced, and expensive, medical technologies on the planet.

It's a rather intimate meeting, occupying a handful of rooms on a single hotel floor, with many of the attendees old acquaintances. Between the more than dozen or so talks and workshops, they spent time catching up and swapping gossip.

It's a small world -- there are only nine proton therapy centers in the United States, with about 21 centers worldwide and an additional eight under development, according to reports given at the meeting. Globally, that breaks down to about 97 treatment rooms.

Only about six companies make the massive cyclotrons and synchrotrons that power the treatment. The market leader is Belgium-based Ion Beam Applications S.A., which accounts for 60 percent of the world market and has installed its cyclotrons in all but two of the working therapeutic sites in the United States. The exceptions are M.D. Anderson Cancer Center in Houston, which uses a Hitachi-built synchrotron, and Loma Linda University Medical Center in California, the first center to treat patients, in 1990, which uses a system built by Fermilab scientists.

The proton therapy world is small largely because of the high cost of entry, with the total price tag for building and getting a center up and running estimated to fall between $180 million to $240 million, according to Morrison's calculations.

But the therapy, which uses high-energy protons to eradicate cancer, allows more precise radiation dosage than traditional radiation therapy. This is generally thought to be most beneficial for pediatric patients with complicated brain or spine tumors, and for whom limiting radiation dose is critical. And some studies -- including one published earlier this month -- hint that it might also help curb side effects of radiation treatment for prostate cancer patients, who make up the bulk of people treated by this modality.

However, despite being attractive for hospitals, it's hard to raise the capital necessary to see the projects off the ground. Many more are announced than ever see the light, similar to "vaporware" -- computer programs that exist only in their initial, feverish publicity. "There are a lot of press release projects," Morrison quipped.

The various barriers to entry and the size of the market mean over the next 15 years, the optimistic projections which envision more than 100 centers in the United States, are three to five times off the mark, Morrison said.

Changing finances

One challenge faced by those looking to develop new facilities is they have substantially higher capital costs and lower debt leverage than their predecessors, even though the financing structures for the centers have "normalized" since the 1990s, when the technology began to be commercialized.

"The proton therapy centers that exist are the ones that can be financed, not the ones that deserve it," observed Yves Jongen, the founder and chief research officer of IBA.

For instance, financing the $135 million University of Florida Proton Therapy Institute, which treated its first patient in 2006, originally involved a complex arrangement, using a mixture of tax-exempt bonds and private loans, grants and philanthropy.




"The financing chart looked more complicated than the beamline," Morrison joked.

But the institute refinanced in 2008 on simpler terms, and more recent projects have had more "normal" health care financing, Morrison said. But even if it's more straightforward now, capital costs are higher. The inflation-adjusted capital costs are 1.5 times greater than in the past, Morrison said, even with artificially low short-term interest rates.

"All this means [is] that the cash that a new facility needs to generate for debt service and equity returns is around 2-3 times higher than the 'early adopters' needed," he said in his report.

Small-scale tech

The capital crunch means developers will look at ways to drive capitals costs down, and this could involve smaller-scale technologies.

"We recognize proton is difficult to finance," Jongen said.

That's why his company, IBA, is developing Proteus One, a smaller footprint cyclotron intended for a one-room treatment facility. It would feature a 220-degree compact gantry built within the design of the cyclotron. IBA told DOTmed News it's looking at a $20 million price tag for everything: beam line, software, gantry and cyclotron. The company expects to start treating patients on it as early as 2013, with further announcements likely at the American Society for Therapeutic Radiology and Oncology meeting next year.

But other companies, most notably Still River Systems, founded by some of the original developers of proton therapy at the Harvard Cyclotron Laboratory and Massachusetts General Hospital, also have smaller systems in the works. Still River says it expects to ship its relatively less expensive prototype later this year. The company hopes to have it treating patients as early as 2012.




One of the key features in developing a smaller system is in shrinking development time -- each day you cut off from the building and planning stage makes the project that much more likely to succeed, Morrison said. In general, the time has fallen from 30-36 months to 28-32 months from the start of building to first treatment, he said. However, it's usually another 3-5 months after that before the center is running a full, 6- to 8-hour treatment day.

And condensing the construction time is one of IBA's goals with Proteus One.

"It's not a linac, installed in 15 days. But we're trying to reduce installation times," he said.

"I want protons"

Still, even if built, for a center to be successful, attracting patients is key. This is where marketing comes in, and what Morrison refers to as a "retail" approach.

Part of the reason for the retail approach is that many proton patients are self-referred. In his talk, Morrison estimated at least 70 percent were self-referred (though he said this was a dated figure -- it's higher now). This was somewhat borne out by other presenters. Eric Backes, director of proton operations at the University of Pennsylvania's Roberts Proton Therapy Center, said their self-referred proton mix was about 30 percent.

And Dr. Andrew K. Lee, the director of proton therapy at M.D. Anderson, shared a story from his clinical experience. One young man, an 18-year-old testicular cancer patient who came to the center, asked for proton therapy after reading about it on the Internet. "I hear you're in charge of the protons," he told Lee. "I want protons."

However, the University of Pennsylvania, which first started treating patients early last year, didn't launch its marketing plan until November, when they put up billboards on the local highway and began airing television commercials. The Monday after that started, the center had double the calls that it had the week before, Backes said.

Profits from protons

Ultimately, as with many medical properties, success depends on good relationships with referring doctors, an appropriate patient population, strong leadership and well-managed volumes. M.D. Anderson said it was seeing about 142 patients a day, above the 115 a day they needed for the center to work. And patient satisfaction is crucial. "The one thing you need is patient-to-patient referral," Lee observed.

Nonetheless, most speakers cautioned would-be developers to have realistic goals: this means centers hoping to reach 21-hour days with an added weekend shift are likely out. "Saturday treatment? Just forget it," Lee said.